The Chicago Purchasing Managers’ Index came in at 56.7 for its most recent release, clearing analyst forecasts that had centered around 55.1. The number is good news on its face, but the real story is the drop from the prior reading of 62.7, which represented a multi-year high in regional business activity.
In English: manufacturing in the Chicago region is still growing, just not as fast as it was. Any reading above 50 signals expansion, so 56.7 is comfortably in positive territory. It just happens to look modest sitting next to 62.7.
What the Chicago PMI actually measures
Think of the Chicago PMI as a monthly temperature check on the business climate across one of America’s most industrially significant metro areas. The Institute for Supply Management–Chicago surveys purchasing managers, the people who actually decide what factories buy and when, and asks them whether conditions improved, worsened, or stayed the same compared to the prior month.
The index has been running since 1967, which gives it a long enough track record to be taken seriously as a leading indicator. When it moves, people pay attention, especially because it tends to preview the national ISM Manufacturing PMI report that follows shortly after.
